SHANGHAI (Reuters) - China Vanke's first public commercial real estate investment products fell as much as 3% in early trade on their debut on Tuesday, reflecting caution towards China's second-largest developer amid a prolonged property market downturn.

The CICC-SCPG Consumption Infrastructure real estate investment trust (REIT) listed in Shenzhen is backed by shopping centres owned by SCPG Holdings, the commercial property platform of Vanke.

The listing came one-and-a-half months after the other three REITs were approved in the same batch. State-backed Vanke is China's second-biggest property developer by sales and is facing short-term liquidity pressures and operational difficulties.

Vanke's onshore shares have slumped 28% since the start of the year, and are hovering near the lowest levels since 2014.

The launch of such REITs comes after China expanded the scope of REITs last year to commercial properties as part of the efforts to prop up a battered property sector. The REITs would allow investor funds to flow to property owners while also giving developers an opportunity to exit their projects.

Around 3.26 billion yuan ($449.88 million) was raised via the issuance of this REIT, but the fresh funds are still small compared to Vanke's cash burn.

"We are concerned by the pace of cash position decline which is at 5.6 billion yuan per month," John Lam, property analyst at UBS, wrote in a note.

With its total cash position of 83.1 billion yuan as of March 2024, the current cash levels can only support 15 months' cash outflow, if the property market and Vanke's debt refinancing market remain at current levels, Lam said.

Shenzhen Metro Group, a state-owned entity and the largest shareholder of Vanke, subscribed to 29.8% of the units of the REIT.

Vanke on Monday reported a second consecutive quarterly loss in the January to March period and a drop in its cash levels, after revenue and margins fell sharply.

After tumbling 28% in 2023, the CSI REITs Index has climbed roughly 7% this year.